Find what is that first years in which a sum of money will

Home » Aptitude » Compound Interest » Question

Find what is that first years in which a sum of money will become more than double in amount if put out at compound interest at the rate of 10% per annum ?

1. 6th years
2. 7th years
3. 8th years
4. Data inadequate

Correct Option: C

Here, P(1 + 10/100)^t > 2P
⇒ (11/10)^t > 2
When t = 8 → (11/10)⁸ = 2.14358
t =7 → (11/10)⁷ = 1.9487
By trial, [11 x 11 x 11 x 11 x 11 x 11 x 11 x 11] / [10 x 10 x 10 x 10 x 10 x 10 x 10 x 10] >2
Hence, the first years in which sum of money will become more than double in amount is 8th year